Potential output will decrease if
A)there is an increase in the price level
B)there is a decrease in the price level
C)there is technological change that increases labor productivity
D)workers choose shorter work schedules in order to enjoy more leisure time
E)the nation's capital stock increases

Question

Quizplus · Accepted Answer

If workers choose shorter work schedules in order to enjoy more leisure time, then the economy's total output of goods and services will decrease. This is because there are fewer working hours available to produce goods and services, leading to a decrease in potential output.

Potential Output Will Decrease If